Funding: beyond 2020 if price stays low

English General Discussions
42

I am not sure by which economic system a 3 year holding period for any asset is speculation.

Again, you are probably ignoring opportunity cost entirely.

Let’s not assume that returns from staking will be the most attractive. It will only be a low bar for risk adjusted return on capital that other investments will have to exceed.

Additionally, 80% of ADA is needed to run the protocol securely. You cannot simultaneously require 80% of ADA staking rights to secure the protocol and tax the holders for owning the ADA they own.

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43

The good thing with liquid democracy is that such suggestions will be decided on expert delegate platforms with limited members, hopefully not on the level of the Community.

Don’t get be wrong. I am not an expert in crypto economics, but neither are you, nor the majority of the Community population :slight_smile:

So I would happily propose this taxation principle on an expert delegate platform, not generally have the debate with the Community.

44

Where did you read the 80%?

Can you please link in the official source?

Thanks

45

" CONFIGURATION OF STAKE POOLS

For maximal efficiency and security, a solid majority of stake (about 80%) should be delegated to a number of stake pools…"

https://staking.cardano.org

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46

However this can mean two things:
A, if say 5billion ada is staked in total, 80% of that should be delegated to stakepools.
B, 80% of total ADA supply has to be staked on pools.

The site is a bit missleading, it might be that A is the case.

47

Exactly. I can’t figure this out.

I know however that taxation on cryptocurrencies in certain countries (like Germany) might incentivize people not to participate in staking to avoid making interest on their assets.

Stake rewards (interest on your crypto assets) would be far off from the fact that your assets would become immediately taxable (20% if I remember well) would you sell them within 10 years of time, no matter one year has passed since you own them. This is for Germany.

So let’s hope it’s not 80% of all the ADA circulating supply… German ADA whale club might not be a good contributor to the Proof-of-Stake protocol in that case.

48

It is A I could see how one could view it the other way though, read Reward Sharing Schemes for Stake Pools to help, which they are referencing on the staking page.

Confusing:

Configuration of stake pools

For maximal efficiency and security, a solid majority of stake (about 80%) should be delegated to a number of stake pools (about 100 seems to be a reasonable number).

The stake pools should be online when needed, and they should provide relay nodes, which are additional network infrastructure. The remaining proportion of stake (about 20%) should belong to “small” stakeholders, who can decide to either participate in the protocol on their own or to simply do nothing."

BTW, I agree with this @bercinho

Which is why I added this:

This forum is not conducive for debates, continue below:

49

@Gabor_Peto Thanks for highlighting the first sentence from the delegation section.

The phrase solid majority of stake does not further qualify what portion of ADA it refers to. That is for a good reason because all ADA corresponds to the total stake.

Given that reason, IMO it means B.

Let’s look at it from a different angle. According to the example which shows the exponential decrease of staking rewards, 700 million ADA will be distributed in the first year. Given that staking would not be such a big deal to ADA holders, why would the majority forego the staking rewards? Even after accounting for taxes on staking rewards it will be a net increase in ADA holding.

Knowing that the rewards will decrease exponentially going forward and that there is potential for ADA to appreciate significantly in the future the first year rewards will be the most beneficial to those who participate in the protocol by staking.

For any reason if some people are unable to participate due to technical difficulties they will be very upset. I find it hard to understand why anyone would relinquish this opportunity unless they can get better returns from some other endeavor.

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50

bercinho: Cardano will thrive equal to its market utility and nothing else. This will be a very substantial source, an abundance over any proforma. The Cardano population understand well, and is keen to make impotent any immoral, toxic scheme such as yours. We’ve suffered far beyond measure from control systems designed to bleed out entire nations by a 1000 cuts of taxation.

Murray Rothbard, how apropos!
“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

51

You are, I presume unknowingly, playing with old ideas historically terminal to prosperity.

Cardano will be self sustaining via ADA’s exponential velocity growth, and via its enormous economies scaled from its game changing utility, not via gunpoint taxation extorted from owners of static ADA!

52

Where did you get this quote from? I haven’t said the quote above.

There is no toxicity from me. Going personal instead of arguing the topic is not how usually this Community in the Forum behaves. Try to come up with a logical reasoning and don’t insult my personality. Maybe look through all my contributions so far before describing me as toxic.

53

Tell me something. Yes / No questions.

Is there really a difference between having a supply of new coins released to the system vs taxing & collecting the existing ones?

When transaction fees are taxed to feed the Treasury is that not taxation?

Do you think it’s fair to have only active / transacting parties (who already provide much more value) pay taxes and contribute to the development of the Ecosystem, while passive parties benefit from the growth without any contribution?

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54

You can look at it from another perspective:
Transacting parties don’t pay taxes, staking parties pay tax on their rewards to the treasury.

55

Yes for sure, so there are two cases:

(1) In case you are staking you are paying taxes, which are being used for the development of the Ecosytsem.

(2) In case you are not staking you are not paying any taxes, still enjoying the benefits of the growth others are paying. Why wouldn´t you stake may have many reasons.

I have issues then with point (2) as I believe in a far taxation system, where everyone has to contribute proportionally to benefit from the growth of the System financed by the taxes.

That´s another question whether there should be any sort of differentiation in taxation, to have it a bit more progressive. Obviously if there is anonimity for the ADA accounts, it´s not possible to apply. Maybe transaction fees should depend a bit on the transacted ADA amount. Not sure …

56

I have to back @bercinho on this. There’s no toxicity or any negativity here. This is just one of @bercinho’s opinions and observations. I find his posts thought provoking and most importantly out of good intentions for Cardano.

Thank You @bercinho

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57

THE TAX POEM, author unknown

Tax his land, Tax his bed, Tax the table, At which he’s fed. Tax his tractor, Tax his mule, Teach him taxes Are the rule. Tax his work, Tax his pay, He works for peanuts anyway! Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he Tries to think. Tax his cigars, Tax his beers, If he cries, Tax his tears. Tax his car, Tax his gas, Find other ways To tax his as$. Tax all he has, Then let him know That you won’t be done Till he has no dough. When he screams and hollers, Then tax him some more; Tax him till He’s good and sore. Then tax his coffin, Tax his grave, Tax the sod in Which he’s laid… Put these words Upon his tomb: “Taxes drove me to my doom…” When he’s gone, Do not relax. It’s time to apply The inheritance tax. Accounts Receivable Tax, Building Permit Tax, CDL license Tax, Cigarette Tax, Corporate Income Tax, Dog License Tax, Excise Taxes, Federal Income Tax, Federal Unemployment Tax (FUTA), Fishing License Tax, Food License Tax, Fuel Permit Tax, Gasoline Tax, Gross Receipts Tax, Hunting License Tax, Inheritance Tax, Inventory Tax, IRS Interest Charges IRS Penalties (tax on top of tax), Liquor Tax, Luxury Taxes, Marriage License Tax, Medicare Tax, Personal Property Tax, Property Tax, Real Estate Tax, Service Charge Tax, Social Security Tax, Road Usage Tax, Recreational Vehicle Tax, Sales Tax, School Tax, State Income Tax, State Unemployment Tax, (SUTA) Telephone Federal Excise Tax, Telephone Federal Universal Service Fee Tax, Telephone Federal, State and Local Surcharge Taxes, Telephone Minimum Usage Surcharge Tax, Telephone Recurring and Nonrecurring Charges Tax, Telephone State and Local Tax, Telephone Usage Charge Tax, Utility Taxes, Vehicle License Registration Tax, Vehicle Sales Tax, Watercraft Registration Tax, Well Permit Tax, Workers Compensation Tax.

Quoted from: Howard-Browne, Rodney. The Killing of Uncle Sam : The Demise of the United States of America

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58

Quotes from Nassim Taleb regarding economists:

An economist is a mixture of 1) a businessman without common sense, 2) a physicist without brain, and 3) a speculator without balls.

Those with brains no balls become mathematicians, those with balls no brains join the mafia, those w no balls no brains become economists.

To have a great day: 1) Smile at a stranger, 2) Surprise someone by saying something unexpectedly nice, 3) Give some genuine attention to an elderly, 4) Invite someone who doesn’t have many friends for coffee, 5) Humiliate an economist, publicly, or create deep anxiety inside a Harvard professor.

A trader listened to the firm’s “chief” economist’s predictions about gold, then lost a bundle. The trader was asked to leave the firm. He then angrily asked him boss who was firing him: “Why do you fire me alone not the economist? He is too responsible for the loss.” The Boss: “You idiot, we are not firing you for losing money; we are firing you for listening to the economist.”

Discussing growth without concern for fragility: like studying construction without thinking of collapses. Think like engineer not economist.

Success in all endeavors is requires absence of specific qualities. 1) To succeed in crime requires absence of empathy, 2) To succeed in banking you need absence of shame at hiding risks, 3) To succeed in school requires absence of common sense, 4) To succeed in economics requires absence of understanding of probability, risk, or 2nd order effects and about anything, 5) To succeed in journalism requires inability to think about matters that have an infinitesimal small chance of being relevant next January, …6) But to succeed in life requires a total inability to do anything that makes you uncomfortable when you look at yourself in the mirror.

[On his greatest disappointment]: That I am unable to destroy the economics establishment, the press.

Friends, I wonder if someone has computed how much would be saved if we shut down economics and political science departments in universities. Those who need to research these subjects can do so on their private time.

Being nice to the wicked (or economist) is equivalent to being nasty with the virtuous.

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59

uhmm…“scheme” ie. the noun that’s not you, points to your belief that “fairness” is socially generalizable, which obviously is demonstrably fallacious. Cardano exists at this very moment because its DNA embodies significant potential as an agent of freedom. Again, Cardano will earn its existence via its use. Cardano’s successful displacement of global monolithic legacy financial systems is possible only by a. Its rapid and wide adoption, and b. Hunting and Destroying Any and All schemes resulting in earning something for nothing.

60

…thoughts like these exemplify the beneficial effect of routinely questioning what you think you know.

Pivot your attention away from executing your vision of “fairness” ie. getting something for nothing, and train it on developing Cardano system(s) which raise the life standards of all people

61

You are entitled to your opinion @deepau, but it would be wise to not instigate a flame-war on this thread about economists being the devil incarnates… :wink:

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